Services are classified in several ways, in order to find the implications of particular class of service to the management actions and improvements necessary. One of the four way classification involves:
1. Tangible actions to peopleâ€™s bodies, e.g. hair cutting, restaurants.
2. Tangible actions to physical goods, e.g. laundry or cleaning the clothes, air freight.
3. Intangible actions directed at peopleâ€™s minds, e.g. training and education, broadcasting.
4. Intangible actions directed at peopleâ€™s intangible assets, e.g. banking, legal service, Insurance.
The two rows classify the service act into tangible and intangible in nature. The columnar division consists of who is the direct recipient of the service i.e. whether it is people or things (possessions).
When tangible actions are directed at peopleâ€™s bodies, then the customers have to be physically present during the service operation/delivery. Customers must enter the â€˜service factoryâ€™. For instance, a customer must enter a taxicab in order to be transported or must enter a clinic/hospital in order to get better.
The customer satisfaction depends heavily upon the interaction with the service personnel, e.g. taxi driver, nurse, doctor; it also depends upon the nature of the service facilities and upon the characteristics of the other users of the service.
Aspects of location and convenient times assume great importance when customer has to be physically present during the service.
Capacity management is an important task faced by the service managers. When the demand fluctuations are present, a physical goods manufacturer can bank upon inventories of goods. But, services are not inventorial. So, what could be the strategies to manage the demand variations? In order to understand this problem better, we must ask the following basic questions:
1. Are the demand fluctuations (cycle of fluctuations) predictable? For instance, the peak demand for accommodation in Goa comes during the Christmas â€“ New Year season and the demand is fairly high from November end to June beginning. Thereafter, it is the monsoon seasons with incessant rains and the demand is very low. Thus, the demand fluctuations are predictable in this
2. What are the underlying causes of these fluctuations?
(a) If it is customer habits, could these be changed through pricing, promotion, and place or product strategies?
(b) If it is actions by third parties, could these third parties be influenced? (e.g. Working days and hours set by industries, businesses, offices, and institutions).
(c) If it is non-forecast able events, very little can be done to meet this sudden demand. Of course, the services could then be offered on a priority basis to a portion/section of the people demanding the service; others can be informed about alternative sources of service so that they are not neglected in their times of need.
If the direct recipient of the service happens to be a thing, then it may not be necessary for the customer to come in contact with the service personnel. While the outcome of the service is important but the process of service production / delivery may not be of any interest to the customer. The numbers of â€˜moments of truthâ€™ are substantially lower in this case.
Due to this reason, sometimes organizations may prefer to convert a people directed service into a thing directed service. For instance, much of customer interfaces in banking are reduced through credit cards and through ATMs.
Similarly, the service operation (imparting education) can be transformed into a manufactured product such as Video Films on various study topics or television-based educational programs, e.g. Zed (â€˜Zâ€™ education), UGC programs, Brilliantâ€™s video films on management. In this manner the intangible action to people can be converted into a tangible action directed at a thing. Thus, the service productâ€™s outward shape and its delivery can be altered to suit the operational requirements. —